tv Fast Money Halftime Report CNBC August 27, 2012 12:00pm-1:00pm EDT
grid of different sizes of diamonds. you've got the colors going down here and clarities going up there. >> reporter: publishing prices in this sometimes secretive industry has had its risks. >> as long as prices are going up i'm a very popular guy. as soon as prices start crashing, i wear a bullet proof vest for a few years. >> i cannot wait tonight. diamond rush, 9:00 p.m. eastern time. >> a lot of good fun on that one. looking forward. back to hq and the fast money halftime report. four hours to go until the close. here's where we stand right now. dow jones industrial average higher by nearly three points. basically flat. s&p higher by three, also flat. nasdaq, relative outperformer with a gain of a third of a percent, nearly ten points. it's all about apple. here's what we're calling on halftime. oil not fearing isaac as it targets oil production facilities in the gulf. you can see oil trading lower. we'll show you that in a second. and the convention effect.
how stocks typically perform when the republicans take the spotlight. we are trading all the big movers today with joe, guy, stephanie and steve. first our top story. apple shares are rallying on its $1 billion patent victory against samsung that came late on friday. will apple's win help it corner the smartphone market? guys, how are we trading this? guy adami? >> i think it already has. great to have you on board. you can say it's $1 billion. for them i can't believe it's that big of deal for them. i think they're just growing into what will become the proper valuation for these guys. we talked about them going into earnings. we've talked about how if you saw a selloff, it's going to look scary. you're going to think the world's coming to an end. that's going to be your opportunity. $100 later that's exactly where we find ourselves. even though it's whatever it is today, $675, $680, might seem ahead of itself in terms of a stock move, in terms of valuation it's still growing into it. as crazy as it sounds probably
still makes sense. >> trading tech neckically perfect. we talked about owning the 640 puts underneath the market. that's where the previous high was. i think you can own the 700 calls as well. this accelerates the potential upside momentum as you head into september 12th. on the other side when you look at potentially who's negatively impacted off of all of this, obviously google comes to mind. but there should be a beneficiary outside of apple. i think potentially that could be microsoft. i know we're going to have gene munster on. love to hear his thoughts to see whether there's validity behind the thesis that players now will graf state toward the windows 8 type of software. >> stevie, my uncle is not dick, grasso. how are you playing this? >> apple, there's too much going forward not to be a buyer of apple. you still have iphone 5 coming out. maybe the thought of an apple tv. >> do you sell it when the iphone 5 comes out? >> you know, i think you might get the chance to sell it. but the timing, michelle, is a little precarious. because you're going into
christmas. everyone, all children, everyone on the face of this earth wanting an apple product. >> stephanie link? by the way, everybody weigh in on samsung as well which got hammered in overnight trade. is it overdone? stephanie, your thoughts on the big play from friday? >> i think from apple's point of view it's more kind of psychologically important versus any change to numbers in the near term. there's not going to be any change to revenues or to earnings or to even units of iphone or ipad based on this decision. but i do obviously think that it is a psychological positive. and now we can go back and focus on the product cycle story. from samsung's point of view, they're going to appeal this. this is going to be several quarters down the road. they're going to make some modifications. i don't think it's really dire straits for them either. i would say the two combined will still have the dominant market share in smartphones at 85% globally. and i don't think that's going to change. >> just real quick keep in mind if you're looking for a short play off of all this, similar to samsung, take a look at htc.
htc is a sell here. they're in a similar position with patents in a dispute with apple, same type of platform that they have with samsung. could be a similar outcome. >> let's bring in gene munster on that point, analyst at piper jaffray with more on the apple ecosystem. your initial thoughts? stephanie brought up a good point. does samsung actually have to take products out of the market as a result of this? how much damage has really been done here? what are the implications? >> the reality is that the features, that's what it's always about, the features of the phone, those change over time. yes, near term that can be a positive impact for apple. negative impact for samsung. they may have to pull some products off the shelf. longer term the features that we love today are going to change. both companies are going to be innovating. my take is that this is definitely a positive for apple but probably not as big of a positive as i think a lot of people think today. >> how about is it as big a negative for samsung? a lot of these products they might have to pull, i understand
they're close to the end of the cycle as it is anyway? >> yeah. that's true. i think from -- there's another element to samsung which is the component supplier part. samsung is seven businesses. one of the businesses supplies a lot of the components, about 40% of the components to the iphone. from my perspective the question about samsung is what happens with that relationship? is apple still going to be getting some of those components from samsung? could this corrupt another part? that's the bigger question for samsung. >> what's the impact on google as the maker of android? do we see a settlement when it comes to lawsuits related to software? does apple get more aggressive when it comes to software? as you mentioned this was product design instead. >> two things. as far as the existing android phones that are out there google has a lot of room to just slowly improve the montization of those. sect they just closed on this motorola acquisition to get ahold of those patents. if you're google you're looking
out for hardware partners and stepping back this morning and saying which of their 12,000 patents that they have now are they going to probably counterpunch with apple? so this drama is far from over. >> gene, when i was younger, there was a company that was taking over the world in terms of their products. everybody had to have a sony product. be it trinitron, walkman. that was a company taking over the world in the '80s. obviously you see where we are now in 2012. is there potential for the same to happen to apple or is it a completely different animal? >> i think it's a different animal because in that case, each of those sony products yus operated independently. people would buy them and they would just use their sony product. today there's this whole concept of everyone talks about it but it's the ecosystem. i think as you go to multidevice, more people have more devices, i think that that ecosystem becomes more -- we survey people, there's a 94% rebuy rate with apple products. you'd never see that with sony because they didn't have that
eco system. >> how about the thesis that potentially microsoft, nokia, and even rim will get a boost because of this ruling? >> i think you kind of throw rim out because they forgot how to design. in terms of nokia and microsoft i think they could get a near term benefit from this. i think that, again, it comes down to samsung, some android products are going to be pulled off the shelf. i think nokia in particular -- nokia and microsoft are probably going to be the two other winners. >> gene, with the smoke screen of everything we're discussing today, amazon just slowly creeps up higher and higher. are they benefiting from this in any way, shape or form given that they were the only ones that really gave apple any competition with their ipad or tablets in that space, or is it cloud that we're missing? what's the next big headline to drop there? >> well, amazon, the reason why that keeps going up is because e-commerce. it's 7% of what people buy in the u.s. is bought online.
eventually that's going to be 30%. amazon is going to dominate that. that's a slow creep higher with that. i think if some of these samsung products get taken off the shelf that's going to be positive for kindle fire. only problem is kindle fire is looking right at a freight train coming down the pipe in october with the smaller form factor ipad which isn't going to be good for kindle fire. i think what's going on with amazon in particular is more about a secular theme versus anything in the tablet. >> fwraet heads up for us to look forward to in the fall as well. thank you so much, gene. good to see you. kayla tausche has a market flash. >> we're looking at shares of wirehouser up better than 1% today, the company getting a mention in barons over the weekend saying if there is a big housing recovery weyerhaeuser -- again bullish on housing recovery. real gains are year to date. take a look at shares up better than 31%. michelle?
let's trade this right now. stephanie, what do you think? any derivative plays? >> we own them. we were buying them at $16 and 18 tl$1 $18. we've had a nice run. on an nav basis trading at a 25% discount. what's key here their payout ratio is much lower than its peer group. they converted to a reit much later than its peer group. i think their dividend goes higher. i think the stock can work into the upper 20s. i'm not chasing it here. >> mr. new world? >> i agree with stephanie. continues to work well. also louisiana pacific. lpx. also some names i know guys mentioned in the past. home depot, lowe's. i don't think you go directly, though, to the home builders. new world. you're unbelievable. >> what do you mean? >> since you mentioned amazon, let me point this out. interesting day so far in amazon. basically the same highs we made in october 2011. stock has rolled over a little today.
we've loved the name for a while. watch this 240 level. close below 240 people will start talking about double tops. keep your eyes on amzn the rest of the day. coming up, we'll track the oil markets. tropical storm isaac. that's going to move oil. not maybe the way you think. first, cnbc's scott cohn following the latest developments from alabama. scott? >> reporter: and throughout the gulf coast, michelle. as you can tell, the conditions are starting to deteriorate even though the storm is still hundreds of miles away. we'll take a look at this. and you would think that oil prices would be going through the roof with a storm that wasn't supposed to hit the production areas. but doing something else. we'll talk about it after the break. want to beat the street? you better tweet the street.
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the beach. you can see it's already starting to deteriorate. the national hurricane center says there is still a wide amount of uncertainty about where this storm is ultimately going to make landfall along the northern fw northern gulf coast. there's still hurricane warnings posted from western louisiana all the way to the florida panhandle. a lot of preparations and concerns about that. but what is now known is that this storm does appear to be headed through a lot of the key oil production and refining areas. let's take a look at the latest track. where isaac has been and where it appears that isaac is going. really threading the needle through the florida straits. but not picking up steam as much as some of the forecasters initially predicted. that's good. but we have a lot of issues when you now look at the track -- or the forecast track compared to the locations of the oil rigs and the refineries. oil and natural gas rigs and refineries through the gulf. it's going through the key areas. there already is an impact. we're hearing now that 22% of
offshore oil production already shut down. that's as of yesterday. 8% of natural gas production offshore. and about 1.2 million barrels day of refining capacity shut down in preparation for the storm making landfall. so you would think considering that 48 hours ago it was thought this storm wouldn't go anywhere near the production areas that we'd see prices going through the roof. we did see a little bit of a spike in gasoline futures last night, but the issue is that it's supply and demand as always. sharon epperson has a post on this right now on cnbc.com that talks about the issue of maybe this is going to trigger a release from the strategic petroleum reserve. also we are still a net exporter of distillates, refined products. we have a little wiggle room here. it still depends on where the storm goes and how strong it is. the current forecast calms for a category 1 storm when it makes landfall late tuesday, early
wednesday. still some uncertainty in that as well. as you know, michelle, forecasting intensity is very, very difficult and very, very inexact. >> we don't know what happens as it moves over the gulf and the warm waters there. everybody should stay tuned to cnbc for hurricane coverage. scott's going to be doing it for us. he was our guy on the ground in the wake of katrina. he knows new orleans well, the oil industry well. let's talk about this and trade this. mr. terranova? >> those refineries are built to withstand category 2 and higher. katrina was category 3. as scott pointed out i would expect you'd get an spr global release of oil itself. there continues to be upward momentum in the refiners both technically and fundamentally. a bigger story is what is going on with venezuela. >> the refinery explosion there basically shut it down. >> it's shutting down what's important is to the east coast of the united states as we
prepare for the heating season. a lot of the distillate product comes from venezuela. you want to be long a name like valero. they have a presence on the east coast. they would be able to make up the short fall. they have pricing power. also in the refiner space holly frontier, western refining. they continue to work as well. there continues to be upside here for those refiners sfwl for all his ver baasty, mr. chavez makes all the time, the fact is he's got this heavy oil. we're one of the few places that can actually refine it for him. >> on the east coast, we need it. >> he can't necessarily cut us off. as isaac barrels toward the louisiana coastline crude oil prices are actually off their highs of the day as you heard scott talking about, falling by about $1. oil industry analyst joins us now. why do you think the drop in crude? scott and sharon epperson are talking about if there's going to be a woorld wide spr relief in case of severe damage or in case of need. >> i think oil prices are falling because the loss of oil production in the gulf of mexico
is far outweighed by the amount of refining capacity that we're going to lose during the shutdown and over the next 10 to 14 days how long it takes the refineries to get back and restore operations. >> it's going to sit for a while. how long does it last, do you think? >> well, i think that we've seen this before with hurricane gustav and ike where oil prices declined $5 and $7 a barrel because we saw that it took a long time for refineries to return. i think you could still have downward pressure on oil prices. >> you look at china. seems to be slowing at their own hand. obviously europe's a mess. is oil at $95 just too rich in your estimation? is there such a geopolitical premium built in, now weather concerns built in, maybe we shouldn't be where we are? >> well, i think it's overpriced. but having said that, the two main drivers are lack of -- lower north sea oil production, as we go through the summer, as well as the premium that the market is putting in for iran as
we've lost 1 million barrels a day of sales from that country that have to be made up elsewhere. >> andy, how do you want to play this? do you play it just through the refineries or do you play it with some of the offshore drillers, where they're seeing shut-ins and they already have significant pricing power. does this drive the pricing of that particular segment in the industry? >> well, i think the refiners still look very good. especially the inland refiners. there has been mention about valero, holly frontier as well as tosoro and others like cvr and calumet specialty chemicals. they're all benefits. >> your assessment of the situation with vens sway la and the refinery explosion there? >> i can tell you that on saturday the venezuelan oil company was out there looking to buy gasoline cargoes off the gulf coast as well as the east coast. it's going to be a pretty bad situation given the damage in their storage facilities, even though the processing units weren't affected. so it is going to affect the gasoline market.
we've seen gasoline futures price up seven cents a gallon today. >> andy, it's joe. just plain and simple for main street america, because i think this happens to be the biggest story, retail gasoline prices, you sound very bullish. i'm bullish as well. what type of print when we look out into whether it be january or february or even the spring of next year do you think we're going to see at the pump? >> well, you know, i don't think we're going to even see $4 a gallon here this year. i think come the dead of winter, we should be declining, actually, about 15 cents from where we are now. put us down to about $3.60. at least next year one of the good things is that the delta trainer refinery will be returning to service, improving rbob supplies as well as expansions and pipelines from the gulf coast. that will allow refinery expansions such as motiva to access that market. >> thanks for joining us. still ahead, bulls, bears, and elephants. a look at how stocks typically
perform the week of the republican convention. first, though, tiffany sparkling today even though earnings came in short on estimates. what's in store for shares of the luxury retailer, next. that's when we return. looking for a better place to put your cash? here's one you may not have thought of -- fidelity. now you don't have to go to a bank to get the things you want from a bank, like no-fee atms, all over the world. free checkwriting and mobile deposits. now depositing a check is as easy as taking a picture. free online bill payments. a highly acclaimed credit card with 2% cash back into your fidelity account. open a fidelity cash management account today and discover another reason serious investors are choosing fidelity. there's natural gas under my town. it's a game changer. ♪ it means cleaner, cheaper american-made energy. but we've got to be careful how we get it.
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welcome back to "fast money halftime report." we're taking a look at the dow which is just shy of losing its gains on the day. the big lagrds being the big cap dif depd players. that's verizon, that's coca-cola. maybe the assumption is these dividend plays are not the place to put your money as the market is starting to turn. either way those are leading the dow close to the break even mark on the day. michelle? >> that is a shift, kayla. it would be dramatic. nearly every investor we've had on has talked about that as a big play for people. stevie, i wish my uncle were dick grasso. is it possible the dividend play is getting tired? >> i actually sold my -- i felt i was a little bit toppy there. they topped out. if the market pulls back which i think it will, i think
everything becomes cheaper. i'll be able to buy them back at a much lower cost basis than where they're at now. >> mr. new world? >> the trade was too crowded. >> i'm not taking the side of steven. i will say i think the capital allocation strategies from corporations is going to intensify as you get to the fourth quarter of this year. you saw what aol did today with the special dividend. unsure of what the dividend taxation rate will be going forward into 2013. i think you're going to see a lot of pull forward. m and m is going to heat up. special dividends will begin to come out in a more intense fashion. >> stephanie link, i hear all that. but the 10-year yield is still at 1.6%. i can buy a huge percentage of the s&p 500 and still get more yield and, perhaps, even get an appreciation of the underlying asset. >> certainly. i think the key here is dividend growth. that's to joe's point, right? you have over $2 trillion in cash sitting in the balance sheets of u.s. corporations. particularly if romney wins,
you're going to have the repatriation possibility. either way you'll see companies continue to raise dividends. i look at more of the di dend growers. something like a jpmorgan, something like a nike, something like a chevron or even a bristol myer. you can get more growth to the dividends going forward. also solid underlying fundame fundamenta fundamentals. >> iron man or iron maiden, is the dividend play tired? >> i don't know if it's tired. the s&p might be tired to stevie's point. last week it staved off this 1398 level to me was critical. you could have an outside week last week in the s&p which would not have augered well. doug ie cass has talked about a potential for a double top. >> tiffany's rallying over 6% today despite second quarter earnings that missed expectations. the stock gapped higher. company also said it was cutting profit forecast for the year.
liz, explain. why is this stock gapping open higher when, in fact, it had nothing but bad news it seems like? >> well, i think they lowered guidance and there was a lot of fear in the stock. i was already published below their expectation or a bull of their revised expectation. a couple other analysts were. people knew globally luxury jewelry sales had been somewhat weak. this was a bit of a relief rally. >> you're looking at the one-year now. you can see it actually had been falling pretty steadily into. you're saying maybe some of it was priced in? >> it was priced in. there was a lot of fear in the stock. it was getting a high volume of incoming calls, people looking to short the stock. a lot of generalists. not people that even focus on consumer all the time. i think that, you know, the results proved not that bad. i think the company lowered the bar. that was the right thing to do right now. >> stephanie? >> liz, do you think that they actually lowered it enough? also on sgna, it looks like that was flat this quarter versus down last couple of quarters.
is that something to be concerned about? >> yeah. hi, stephanie. i think they lowered it enough. i think as i look at their -- the second quarter, they said results were very much in line with their expectations. they don't have anymore cloudy visibility about the fourth quarter. but they felt like the street didn't believe their fwi dance so they were going to lower the guidance and we'll wait and see what the fourth quarter holds. in terms of the sgna there was a little pushout into the third quarter. timing of marketing spending. i don't think there's anything to be too terribly concerned about there. i think the other really important point is that gross margins seem to be kind of hitting a bottom and there should be some improvement in trend as we move into the third quarter and up in the fourth quarter. >> liz -- go ahead. >> liz, when you see people say they wanted to short tiffany's, do you see them wanting to buy anything in your coverage universe? we've seen an incredible move in abercrombie. everyone was avoiding it like the plague with european concerns. now you see people starting to dip their toe back in abercrombie. are they flipping out of tiffany
and into something else in your space? >> yeah. i mean, it's hard to say how much is short covering versus real buying. but i do think that for high quality names like tiffany, there are real buyers and people who look at the valuation and say, okay, now that numbers have come down this is typically a good point to enter that stock. abercrombie, i'm not quite sure. i think that's a little bit of a different story there. i think there was heavy short interest. and the stock is -- is very inexpensive. but there's also a lot of uncertainty on the horizon for them. i don't think it's quite in my assessment rises to the quality level of a tiffany, something that a long-term investor would probably be looking to buy on the cheap. >> liz, you're done. thanks so much for joining us. we appreciate it. >> thanks for having me. big shift taking place within india's elite. less gold. more diamonds. gold demand in the second quarter down about 30% as the world's largest gold consumer shifts their fashion trends. seema mody joins us with more. >> i did a little research.
india's affluent women are changing their shopping habits. it's less about gold and more about diamonds. the world gold council reporting that during the second quarter the gold jewelry sector posted a 15% year over year decline due to the sharp drop in demand in india. some of the factors that have contributed to this decline, slowing gdp growth, currency fluctuations, domestic inflation and higher interest rates. but there might be one more. we could add to that list. change in fashion. while traditionally indian women have been known for their obsession with gold, many of the jewelry retailers i spoke with in india said diamonds and semiprecious stones are becoming increasingly popular among affluent women. listen in. >> demand has definitely changed in the last year. usually our gold products are the best sellers. recently i've seen semiprecious stones and diamonds become more popular and fashionable. to date our diamond and semiprecious stone business has
grown 60% from last year. >> all right. citi analysts say rough diamond consumption is a $2 billion opportunity in india growing 5% year over year. main diamond players that can benefit from the fast growth, rio tinto, bhp and harry winston. vice president at rbc capital markets global futures says the fact that diamonds are growing in popularity is not enough to replace them as an alternative to gold in india. of course, guys, the real test will be this october when india celebrates its biggest holiday of the year. i'll be celebrating as well. an auspicious time for indians to splurge on the yellow metal. we usually see an uptick in consumption during this time. >> very cool. they are a girl's best friend. what took you so long. check out bob pisani's latest documentary "the diamond rush." premieres tonight at 9:00 p.m. eastern time. let's trade this. can't really trade diamonds. they're not a commodity like gold in a standard size. what do you do, mr. new world? >> i think for the very first
time i said last week the sleeping giant kind of awakened itself again. that's silver and gold. you had this technical breakout above the 200-day moving average. investors frustrated with the performance of gold and silver over the last six months, they stepped back in again. what i like about it is that it continues to hold the upper trajectory it's had on this technical breakout. although i think there is credibility to the fact that some of the consumption is waning in particular from india, i think when you look globally there is this desire to own gold and silver once again in that paper asset form. >> thank you, seema. thank you, guys. on the way, the final week of summer. is it the bull's last hurrah? we're going to have some answers. as the markets get ready for ben bernanke's key jackson hole speech on friday, what are we going to do ahead of that? what are we going to do that day? more "halftime report" coming up. on on which merrill lynch has been built. today, our financial advisors lead from a new position of strength. together with bank of america,
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investors will be tuning into the republican national convention tomorrow to hear more about fiscal policy and the economy. sam stovall is chief equity strategist at -- what do stocks normally do during the republican convention? is there a pattern. >> yes, michelle, there certainly is. going back to 1900 what i found
was that as most people surprise, the market does a little bit better whenever the republicans are in their actual convention. and then the market actually is relatively flat in the five days following the convention. whereas during the democratic situation, what we find is that the market has declined on average about 10 of 16 times during their conventions and continued to fall in the five days after the convention. >> the numbers bear that out. you're not going to make me bear the brunt of nasty conspiracy theory e-mails about how this is really about being anti-democratic? >> exactly. no, the numbers bear this out. i wrote a report called conventional wisdom just last week. i have that data to provide. >> all right. are there other thoughts as we move into this republican -- what sectors would do well or picks? >> certainly i guess the question is, if we do end up with a democratic administration once again, the concern being
there'll be increased taxes. and so i think investors are worried about some of the high fliers such as consumer staples, telecom services and utilities being pressured because of their high dividend yields. but you could actually see a benefit fallover into the real estate investment trust category. because now in a sense they're having an equal footing with the other high dividend paying companies like simon properties, companies like home properties could do relatively well. also the alternative energy space. whether it's solar, hydro, et cetera, could do well under a democratic administration. >> oh, okay. got it. stevie, i have way more hair than dick grasso, what do you think about what sam stovall says? >> we're going to stick with this theme the whole show. i'm not going to fight back. sam, when you look at the election year cycle everyone points to obviously the s&p moving higher going into year end. you have a 1450 target at the s&p for year end.
we're right about there. 3 percentage points, 4 percentage points away. usually that's because the incumbent is spending a boat load of money going into the election. is that true? if so, wouldn't you see a little bit of a pullback if ben bernanke disappoints at jackson hole at the end of the week? >> i think certainly we could be seeing a bit of a pullback. we've advanced more than 10% off of the early june lows. we really haven't digested some of these gains. actually in this week's report, today's report, i showed a chart when you look at the average price performance of all election year markets since 1952, we normally go through a bit of a digestion of gains between now and sometime about three weeks before the election itself. and then we start to see a movement higher as investors breathe a sigh of relief that the uncertainty has been lifted. we're right now in that period in which we possibly could be seeing digestion. also we're heading into september which is normally a challenging month.
>> yeah. you would know the numbers on that. this is the scariest month of the year, right? a lot of people seem to think it's october, but it's not. >> exactly. whether you go back to 1990, 1970, '45, '29 or 1900 september is the worst month by fair. fasten your safety belts. >> sam, good to see you this morning. afternoon, i mean. >> thanks. let's hit our chart of the day. the ishares china etf. fxi nearing bear market territory. falling roughly 17% since its 52-week high of 40.74 hit back on february 29th. leap day. it's lower again today. is this a story you should be watching? raise your hand. does this make anybody super nervous. >> it should. >> why? >> if china is the growth engine of everything that happens here in the united states, to a certain extent, a lot of people have hitched their wagon to that concept, the shanghai composite is at, i believe, a three-year
low. very quietly down almost 2% today. maybe they're trying to tell you something. they've led in the past in terms of their index. you know, who's to say they're not going to lead in the future. doug cass again put out an interesting piece this morning. it scares me a little bit. if we've hitched our wagon to china maybe something's amiss. >> stevie? >> if we're all focused on europe and then we're focused on saying china is growing maybe not as much as we'd like it to grow, but now all of a sudden we're concerned with it, as china goes, as europe goes, how can the u.s. not go? so that's why i lightened up on pretty much all of my core holdings today. i think we're closer to the top than we are from the bottom. >> stephanie? >> i think you're going to continue to see monetary policy eases in china. you've already got a few rrr cuts. two interest rate cuts. you've had various different stimulus programs. they're not these big headlines, of course, that we want. that's probably needed. but at least they are doing some
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coming up today 1:00 p.m. eastern time on power lunch, bracing for isaac. live to the impact zone and live inside the united airlines nerve center and find out how they're trying to keep planes in the air before that storm hits. we know who won the apple/samsung patent suit by now. who really lost? we'll show you some of the collateral damage to smaller companies. bob pisani takes us on a fascinating trip inside a diamond mine. the amazing pictures today on "power lunch." back to michelle and more on "the fast half." >> markets are bracing for the biggest event of the week. ben bernanke's speech on friday at the fed's annual jackson hole conference. investors will be looking for hints that qe-3 is on the way. but btig chief global strategist and cnbc contributor dan greenhouse thinks a deal is far from done. dan, good to see you. everybody hoping for qe-3 on friday or some hint of it, are they going to be disappointed? >> let's remember the jackson hole conference, really public
appearances in general, are not where policy gets made. if traders are looking at the jackson hole conference for some definitive indication of an additional asset purchase program, they're probably going to be disappointed. >> correct me if i'm wrong. he did lay out a pretty big change in strategy a couple years ago in jackson hole. didn't he use this event at one point for something? >> there's no doubt given the conference and given the title of this particular speech, there's almost no doubt he's likely going to lay out the policy options. but with respect to the last fed statement and the fed minutes, it's really, really unlikely for him to publicly endorse one particular potential outcome than another. again, he will lay out the cut in interest on excess reserves and additional asset purchases and he'll talk, i assume, about the benefits and costs o of each. endorsing one over the other which i guess some people are talking about is probably not going to happen. >> handicap this for me. when i listen to you i think the markets could be disappointed and sell off on friday. am i reading that wrong? is it too hard to know?
>> it's always difficult to predict the movement of markets in the short term. what i will add to this conversation is i remind people mario draghi speaks the next day. while he's very unlikely to say anything in front of the ecb meeting on the 6th -- >> that's on saturday, see. we're not here that day. >> yes. but the world still goes on. given our conversation with clients indicate people are far more concerned about europe than they are the united states. >> monday could be the big day is what you're saying after draghi speaks on saturday. >> tuesday. >> tuesday. >> certainly the potential is there. >> it's joe. let me ask you this. how much does he say behind the scenes to ben bernanke and how much of what he says actually motivates a lot of what we see in september 12th from the fed? >> that's where the jackson hole conference is particularly helpful. you get all these guys together in one place talking face to face. and in that regard, to the extent the global economy is slowing and central bank accommodation is on the upswing
rather than not, it helps to have everybody on the same page. and so behind the scenes i have no doubt that mario draghi is going to be quite candid with ben bernanke. with respect to the united states, when europe figures itself out the big question is is what effect does that have on the u.s. unemployment rate? because that's where if monetary policy still has an impact, ben bernanke's focus is going to be. >> stephanie, are you taking any big positions ahead of bernanke? do you want to wait for draghi on saturday? what do you think? >> it's going to be very important friday, saturday and then obviously the 12th with the fed meeting and that kind of thing. i wanted to ask dan, do you think that the u.s. -- do you think the u.s. is in bad enough shape that actually that bernanke and team need to do something? or do you think that muddling through 2% or so is good enough? >> well, how i feel about it and how policymakers feel about this are two different things. i think too often people get caught up in whether it's the s&p 500 or the john molden muddle through economy.
they take -- they sort of forget to look at it from a central banker's perspective. in that regard, lower interest rates are better than higher interest rates in terms of stimulating aggregate demand. now, i believe that the lot of what ails the u.s. economy and is hindering investors and market participants more generally is not necessarily completely solvable by monetary policy. so i personally don't think they quote, unquote, should do qe-3. although i would add that has nothing to do with treasury borrowing rates or the deficit. >> dan, good to see you. so far it hasn't, right? >> september 12th is going to be an interesting day. we're going to find out whether the iphone ecosystem is more powerful or ben bernanke. >> all right. coming up, a management shakeup at the helm of navistar. >> what's this song? >> this is the grateful dead. >> no, no. nothing to do with navistar. trucking business. you've got to wake up, girl. >> i've only been to one
grateful dead concert in my life. b.o., pot and patooli. the helm of navistar has changed. a look at whether the struggling trucking company can regain some traction. i get it. keep on trucking. we will be right back. [ male announcer ] at scottrade, you won't just find us online, you'll also find us in person, with dedicated support teams at over 500 branches nationwide.
i'm kayla taucshe. ggp popping. another letter to the board saying that management offered to buy the stake in g gp in july. that would have been a premium of, of course, now ackman trying to get ggp to consider a full sale of the company. we'll see if he succeeds and shares up nicely today. back the you. >> he is back! all right. shares of navistar seeing a nice pop today up about 4%. the trucking company announcing high level changes and the appointment of a new interim ceo. cnbc's herb greenberg is watching the story. joins us now with more. >> first question i asked myself when i saw this, i said, what took them so long? you knew something was going on with the company. remember, dan who's the now former ceo sort of bet the company on a very controversial new engine. and now, you know, you say what was the final straw? take a look. final straw i think was a big
army contract for humvees which they lost going back about a week ago. this company said it was the big one. this is going to be really to take them forward over the next few years and lewis campbell. he is an independent which is independent. they didn't take somebody from the board and you might have thought. they took somebody from outside the company which is very fascinating. he's an interim. remember, interim ceo. he is going to get 500,000 stock prices and $91 and current price there. >> winning today. >> you want to look at this. the reality is, i'll be talking about this more later on "street signs" is they are not out of the woods yet and that's what investors have to understand here. >> stevie, you are so not king of the club grasso. you have been negative on navistar for a long time. >> as herb said, they have plenty of things to juggle here.
they have the engine technology issues. think eve got a potpourri of issues that are negative and it trades around the 52-week low. i think it was a political football. it continues to be one. i wouldn't be in the name. >> by the way, can i mention one thing, guys? coming out with earnings next month and an independent guy in there -- >> kitchen sink this baby. whoa! ugly. stephanie, how about you casino what do you ahead of that what's potentially an ugly earnings report? >> yeah. we have been negative on this stock. more importantly to me is that the nafta truck market, the demand, decelerating and why you have had a lot of companies l e coming down, rallied a bit off the lows but i think the name to own is something like an eaton because they're buying cooper industries. diversifying and you get exposure if demand comes back. i think they have too many headwinds and we have to see
better execution and who knows if this guy can do it? >> that's right. good story, herb. thank you. all right. let's hit the biggest pops and drops in midday tradeling. pop aol 2%. stevie grasso? >> a couple of bullish headlines. accelerated buy back. a special dif debd. technically it looks okay. i'm not in the name. probably wouldn't buy it. i don't like the name. >> dollar thrifty. joe? >> big deal? what do you do with hertz and avis? i don't know if that's the places to go to. go to rush enterprises here that works in this environment. you can look at penske. >> all right. best buy, a pop. what do you think, stephanie? >> the company and the founder back in discussions again. really who knows if this deal will come about or not? i think that the fundaments, problems. >> all pops today.
hudson city banc. guy? you hit the nail on the head. i think it's pretty stock specific and if you're looking to buy something in the hopes of something to happen barking up the wrong tree. >> all right. for all of you who are really in to the grateful dead, a pop for air guitar and american air shredder named nordic thunder. look at him right now. you can't believe this. rocked his way to first place at the world air guitar championships in finland. the ax man stroke a cord with the judges barely meeting out a teammate for the victory. >> dating him a month ago? no? >> i was going to say, you competed in this, right? iron maiden? >> no, no. do you have footage? i doubt he's an ironman. >> contestants from around the world competed vying for the grand prize, a real guitar. >> real guitar and a date with mcc at a restaurant of her
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